What to Read in The Hindu Editorial( Topic and Syllabus wise)

Editorial 1: ​​Tariff wars and a reshaping of AI’s global landscape

Context

Economic efficiency and innovation may suffer, but some countries could be vulnerable yet advantaged.

Introduction

Following the 2024 U.S. presidential election, the revival of major tariffs could trigger a deep restructuring of global tech supply chains critical to AI development. As dominant players adjust, countries like India may emerge in a precarious yet promising role — serving as a “third option” in the U.S.–China tech rivalry.

Impact of Tariffs on AI Infrastructure Costs

• Increased Cost of Critical Imports
  • Tariffs have significantly raised the pricesof imported components essential for AI infrastructure.
  • In 2024, the U.S. imported nearly $486 billionworth of electronics.
    • Of this, around $200 billionwas spent on data processing machines, primarily sourced from Mexico, Taiwan, China, and Vietnam—all affected by U.S. tariffs.
  • These rising costs risk making the S. the most expensive country to build AI infrastructure.
  • As a consequence, companies may relocate data centre projectsto more cost-effective countries, including China—the very country many of the tariffs were meant to counter.

Tariff Evolution and Expansion

• Trump-Era Tariffs (2018–2020)
  • The initial wave led to increased prices for imported semiconductor components.
• Current Tariff Landscape (2025)
  • The current regime imposes tariffs of up to 27%on critical AI hardware components.
  • These include:
    • Specialised AI accelerators
    • Advanced logic chips
  • These components are fundamental to AI computation, making the tariffs especially disruptive to the U.S. tech sector.

Economics behind the scenes

1. Economic Rationale vs. Practical Challenges of Tariffs

• Theoretical Justification:
  • Tariffs are designed to stimulate domestic productionthrough import substitution.
  • Example: U.S. semiconductor manufacturing capacity is projected to triplefrom 2022 to 2032 — the largest global growth rate in this sector.
• The Ricardian Reality:
  • Ricardian trade theoryreminds us of comparative advantage, which continues to apply even under protectionism.
  • AI hardware production relies on globally dispersed technical capabilities, making it inefficientwhen global supply chains are disrupted.

2. Economic Costs of Protectionist Tariffs

• Losses in Efficiency and Innovation:
  • Tariffs cause:
    • Supply chain disruptions
    • Increased production costs
    • Investor uncertainty
  • These factors discourage innovation and long-term investment.
• Empirical Evidence:

Indicator	Effect
1 std. deviation ↑ in tariffs	Reduced Output growth by 0.4% over five years
Full reversal of recent U.S. tariffs	Could result in 4% cumulative output gain
AI innovation impact	Slower progress due to limited access to frontier tech

• Deadweight Loss:
  • Tariffs may shield domestic firmsfrom foreign competition, reducing innovation incentives.
  • Restricted access to advanced imported technologiescreates inefficiencies, harming both producers and consumers.

3. AI-Specific Impacts: Infrastructure, Innovation, and Inequality

• AI Infrastructure Requirements:

Year	Required Data Centre Power Capacity
2024	11 GW
2027	68 GW
2030	327 GW

• The rapid increase in AI chip demandnecessitates massive infrastructure scaling.
  • Failure to meet these needs will undermine U.S. competitiveness in AI.
• Innovation Stratification:
  • Advanced, costly AI infrastructurebecomes a barrier to entry and a key factor in innovation leadership.
  • This creates a stratification effect, where only a few players control major breakthroughs.
• Tariff-Driven Global Inequality:

Country Type	Tariff Impact
Developed Countries	Reduced Technology transfer rates, Reduced innovation pace
Developing Countries	Increased Technology transfer (short term), but Increased inequality

• This complex dynamic alters innovation incentivesand risks widening global disparities in AI capability.

India’s Strategic Opportunity Amid U.S.-China Tech Rivalry

• India is emerging as a strategic “third option”in the ongoing S.-China technological competition.
• IT export growth:
  • Indian IT exports have grown at 3% to 5.1% year-over-yearrecently.
  • AI and digital engineeringare among the fastest-growing segments within India’s tech sector.
• The Indian government is actively supporting AI and semiconductor sectors through:
  • Significant AI programmes.
  • Billion-dollar semiconductor fab proposals.
  • Multinational R&D centres such as AMD’s $400 million design campus in Bengaluru.

India’s Comparative Advantages and Challenges

Factor	Details
Labour Costs	Relatively low, providing a cost advantage.
Talent Pool	About 1.5 million engineering graduates annually, many skilled in AI development.
Dependence on Imports	Heavily reliant on imported hardware and international collaborations for AI infrastructure.

• Potential Risks:
  • Tariffs and supply chain issues may raise AI infrastructure costs, slowing India’s global AI ambitions.
• Potential Benefits:
  • India could gain if companies seek alternatives to Chinafor manufacturing and data centre operations.

Economic Effects of Tariffs on AI Development

• Tariff policies have accelerated the “capital substitution effect”:
  • As hardware costs rise, firms shift focus to:
    • Algorithmic efficiency
    • Model compression techniques
    • Hardware optimizationrather than simply scaling raw computational power.
  • This creates price signals encouraging innovation in efficiencyrather than just hardware expansion.

Metric	Observation
Cost decline in AI model usage	Falls by roughly 40 times per year

• Consequently, while tariffs may increase upfront infrastructure expenses, consumer-level AI applicationsmay not experience immediate price rises.

Role of Regulatory and Economic Environments

• Tariffs interact with different regulatory frameworksto shape competitive dynamics:
  • Lenient data protection laws, widespread digital access, and abundant training data can offset hardware cost disadvantages.
• This interplay means that regulatory and economic factorsmay produce complex, non-linear effects on AI competitiveness, defying simplistic analysis.

Decentralised AI development

• Tariff changes have driven the development of specialised AI hardwaredesigned for specific applications instead of general-purpose computing.
• This shift is characterized by the rise of application-specific integrated circuits (ASICs), marking a new architectural approach.
• To optimize data centre infrastructure for AI inference:
  • In 2023, about 30%of workload accelerators were custom ASICs.
  • By 2028, this share is expected to exceed 50%.

Conclusion

Ironically, efforts aimed at boosting domestic technological strength might unintentionally speed up the decentralisation of AI development. Historical parallels indicate that when technologies encounter market limitations, they tend to shift toward more distributed models. A relevant example is the transition from mainframes to personal computers during the 1980s, which illustrates this trend well.

 

Editorial 2: ​Misplaced urgency

Context

The Madras High Court has in effect undermined a Supreme Court ruling

Introduction

The Madras High Court has stayed Tamil Nadu’s amended laws empowering the State to appoint Vice-Chancellors (V-Cs), restoring this authority to the Governor-Chancellor. This decision challenges the State’s autonomy and reignites a constitutional debate on whether University Grants Commission (UGC) Regulations can override State legislation, especially amid conflicting Supreme Court precedents on V-C appointments.

Madras High Court Halts State’s Power to Appoint Vice-Chancellors

• The Madras High Courtstayed the operation of Tamil Nadu’s amended laws that allowed the State government to appoint Vice-Chancellors (V-Cs) in 18 State universities.
• This interim ordereffectively pauses the momentum gained after the recent Supreme Court judgment, which had granted deemed assent to 10 Bills delayed by the Governor.

Governor’s Powers Temporarily Restored

• The court’s ruling reinstates the Governor-Chancellor’s authorityto appoint V-Cs, which the contested Bills had aimed to remove.
• As a result, appointments to nearly a dozen universities remain on hold, leading to a continued administrative stalemate.

Legal Basis for the Interim Relief

• The High Court’s decision was based on a petition arguing that the amended Acts violate existing Supreme Court rulingson V-C appointments.
• Key precedents cited:
  • Sreejith P.S. vs Dr. Rajasree M.S.(APJ Abdul Kalam Technological University)
  • Gambhirdan K. Gadhvi vs State of Gujarat(Sardar Patel University)
• Both judgments emphasized the need to comply with Regulation 7.3 of the UGC Regulations, 2018, which outlines norms for search committee composition and appointment processes.

State’s Argument Rejected by the Court

• The Tamil Nadu government argued that it had adopted the UGC Regulations in 2021, excluding Regulation 7.3.
• The High Court dismissed this claim, asserting that removing the Chancellor’s role in appointments is clearly unconstitutionaland legally untenable.

Concerns About Judicial Overreach

• The urgencywith which the Bench acted to invalidate the amended Acts has been criticized.
• The court:
  • Overlooked the State counsel’s submissionthat a petition to transfer the case to the Supreme Court was pending.
  • Was informed that the Supreme Court had asked to be kept apprised, yet this was not factored into the decision.
  • Issued the interim order without giving the State sufficient timeto respond with a counter affidavit.

The Larger Constitutional Question

• The situation reflects a deeper legal dilemma:
  • Can UGC Regulations, issued by a subordinate authority, override State legislationenacted under constitutional powers?
• Past conflicting judgments — such as Kalyani Mathivananand Jagdish Prasad Sharma — make this an unresolved issue.
• The Supreme Court, if it takes up the case, may need to offer a final interpretationto settle this constitutional question

Conclusion

The interim order has deepened the stalemate in Tamil Nadu’s higher education, leaving key universities leaderless. More importantly, it underscores the unresolved question: can subordinate regulations like those of the UGC supersede State laws? The matter now awaits Supreme Court clarity, which is essential to settle the jurisdictional conflict and restore functional order in university governance.